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Offshore savers are used to banks packing up and leaving sadly its been a common occurrence in recent years.

When a banking operation announces it is closing down, its more important than ever for those savers with the bank to keep their eyes on the ball.

After AIB announced that it is to close its business in the Isle of Man (Other OTC: MAGOF.PK - news) , AIB International, it said it would announce how the closure will take place.

We now have more details of how the wind-up will happen. Although the bank is not due to close finally until the end of next year, AIB International is putting measures into place. This means it is a good idea for the 20,000 savers with the bank to make alternative arrangements sooner rather than later.

This is because AIB International has written to all its customers telling them that from June 1, interest rates on all accounts will be reduced.

And in addition, while AIB International used to automatically reinvest fixed-rate bonds into new bonds of the same length, with effect from June 1 proceeds from any bonds maturing will instead be put into the Instant Saver account.

Currently, Instant Saver pays 2.5pc but this will change from June 1 to a less favourable rate. This means that if you have a fixed rate with AIB International, you should make a note of the maturity date and on that date, move the money elsewhere.

Some savers may still have many months to go before their saving deal ends. But if they wish to move their money before then, AIB International will allow withdrawals now without penalty.

While one bank leaves the market, another that had a possibly uncertain future has reaffirmed its commitment to offshore savers.

National Australia Bank has just announced the details of its review of its UK operations, Clydesdale and Yorkshire banks, which includes its Guernsey offshoot Clydesdale International . While the bank has announced onshore cutbacks, the offshore operation is safe. A spokesman for Clydesdale said: I can confirm there will be no changes to Clydesdale Bank International as part of the strategic review outcome.

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Expat rates: as one door shuts, another remains ajar

09 May 2012

A new report from Appleby shows that transaction values for mergers and acquisitions (M&A) in major offshore financial centers rose by 25% in the first quarter of 2012.

The first ever Offshore-i report from Appleby, the worlds largest provider of offshore legal, fiduciary and administration services, looks at M&A activity for the first quarter of 2012, providing sectoral analysis and expert insight on deal types and geographic trends.

The key findings of the report show that offshore deal values in Q1 2012 increased by 25% from the previous quarter's USD23.2bn to USD30.9bn. However, the volume of deals taking place offshore was down 24% on the last quarter of 2011 and was 26% lower than the same period of last year, revealing that corporate transaction activity continues to be depressed.

The number of transactions in the offshore sector in Q1 2012 amounted to 412. However, while deal volumes were lower than the same period a year ago, the report shows that there is still a reasonable amount of activity going on across the offshore world.

The most popular destinations for investors doing deals involving offshore targets are Hong Kong and the Cayman Islands, while the banking, insurance and financial sector continues to dominate offshore activity, well ahead of the next area of interest, wholesaling.

The report finds that most of the deals in the quarter were minority stake transactions rather than full takeovers.

It will be interesting to see if this positive increase in values continues into the rest of 2012, said Peter Bubenzer, Applebys Bermuda-based group chairman. The challenges ahead are manifold, but there are ongoing signs of real buoyancy in Asian and other emerging markets.

The report says offshore transactional markets have been affected by global economic pressures, and in the first quarter, the United States economy faltered amid fears that any recovery may be lacklustre. This impacted transactions in the offshore jurisdictions of Bermuda and the Cayman Islands, which derive the bulk of their business from America. Continuing uncertainty about the Eurozone, and the potential contagion from Greece of the sovereign debt crisis into the Spanish and Italian markets hit deal drivers elsewhere, the report said, while fears about China's ability to maintain high growth rates further dented confidence. Nonetheless, the report reveals that the continuing strength and attractiveness of the Asian markets is driving investors doing deals involving offshore targets, primarily in Hong Kong and the Cayman Islands.

Meanwhile, Mauritius emerged as the offshore economy experiencing the greatest growth in M&A activity, with the number of deals involving targets there jumping from six to 12 between Q1 2011 and Q1 2012.

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Offshore Merger And Acquisition Activity Rises

Australia and New Zealand Banking Group said first half profit rose 5 percent to a record high as strength in its growing international operations outweighed shrinking margins at home.

Australia's top four banks raked in record profits last fiscal year and Australia and New Zealand Banking Group (ANZ) remains on track to continue this streak with its push into Asia starting to pay off.

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"Their Asian strategy is probably one of the highlights, that is going quite well, and I think for the first time they can show the proof in their strategy, which is a very strong positive because that's only going to get better as time goes on," said Peter Vann, senior analyst at Constellation Capital Management, which owns ANZ shares.

The growth in profits comes at a time when funding costs are still elevated, competition for deposits is fierce and ANZ feels the tight market conditions warrant raising of interest rates independently of the central bank.

Underlying first-half profit at ANZ, Australia's fourth-largest bank, rose to A$2.97 billion ($3.07 billion) from A$2.82 billion a year ago. The earnings matched the average forecast of eight analysts surveyed by Reuters.

Underlying profit strips off one-offs and investment gains and losses.

ANZ is trying to model itself on HSBC

Mike Smith, ANZ Chief Executive Officer, said the strategy was paying off with good results outside of Australia and in its internationally focused Institutional division.

Net interest margins fell to 2.38 percent overall, with Australian margins down 13 points as competition for deposits heated up and funding costs rose.

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ANZ Posts Record First-Half as Offshore Ops Grow

By Angus Whitley and Brett Foley - Tue May 01 23:28:12 GMT 2012

Australia & New Zealand Banking Group Ltd. (ANZ), Australias third-largest bank by market value, said first-half profit rose 10 percent on higher income from its offshore businesses.

Net income in the six months ended March 31 increased to A$2.92 billion ($3.02 billion) from A$2.66 billion a year earlier, the bank said in a statement today. It was expected to report profit of A$2.97 billion, according to the average of seven analysts estimates compiled by Bloomberg. Underlying profit from the Asia Pacific, Europe and America unit rose 21 percent from the previous six months.

Chief Executive Officer Michael Smith is cutting jobs, trimming expenses and turning to Asias faster-growing economies to help offset a struggling domestic housing market and rising funding costs. Australias central bank said yesterday that Europes debt crisis might deliver adverse shocks for some time as it cut benchmark borrowing costs at home by a larger- than-expected margin to spur economic growth.

We are managing in what could be described as a work out phase in the global economy with the situation most acute in Europe, Smith said in todays statement. This will continue to cause volatility in global markets for many years.

ANZ Bank stock has surged 17 percent this year, making it the best performer among a quartet of Australian banks that includes National Australia Bank Ltd. (NAB), Commonwealth Bank of Australia (CBA) and Westpac Banking Corp. (WBC) The benchmark S&P/ASX 200 index has gained 9.2 percent.

Net loans and advances in the Asia-Pacific region, Europe and America surged 32 percent from the same period a year earlier, more than four times the pace of growth in Australia, ANZ Bank said. Deposits at those offshore locations jumped 34 percent, more than double the advance at home.

At the banks institutional division, growth in profit, lending, and deposits also outpaced advances in Australia.

The result showed the value of reducing the banks reliance on Australia, which was a drag on earnings, Smith told reporters today. The profitability of lending in the banks domestic market is declining and theres a persistently lower demand for credit, he said.

The banks group net interest margin, a measure of the profitability of lending, fell 8.9 basis points to 238.3 basis points from 247.2 basis points a year earlier. The Australian business had the lowest margin, according to a presentation filed to the stock exchange.

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ANZ Bank First-Half Profit Rises 10% as Offshore Earnings Surge

April 26, 2012 Santiago, Chile

Should we crawl into bed with the IRS?

Thanks to the steady barrage of US government regulation ranging fromthe obtusely insipid Dodd-Frank financial reform to theimpossible-to-implement Foreign Account Tax Compliance Act (FATCA),banks everywhere have to make this decision.

In short, Congress has arrogantly passed legislation to control foreignbanks on foreign soil. FATCA, for example, requires that every singlebank on the planet enter into an information-sharing agreement with theIRS.

Banks that dont comply will face severe penalties, including beingsubject to a steep withholding tax on funds sourced through the US.

In the long-run, Congress will have put the final nail in the coffin ofthe US banking system as the market will simply establish an alternativedestination to source, clear, and transfer funds.

For now, though, many banks are simply walking away from US customersaltogether throwing their hands up and saying we would rather not dobusiness with this entire market rather than deal with Uncle Sam everagain

To be clear, this is a bank-by-bank decision that each one is makingindividually. And were seeing -a lot- of banks around the world, fromSingapore to Panama to the Cayman Islands, say thanks but no thanks toUS customers.

But, as the saying goes, whenever one door closes, another one opens.OK, maybe not exactly 1 for 1 but there are still plenty of optionsaround the world where US taxpayers can establish foreign bank accountsto diversify their savings abroad.

Not a bad place to visit your money...

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Eight Places Where Americans Can Still Bank Offshore